Skip to content

Stock Market Indices

Stock market indices are measures that represent the performance of a specific group of stocks or the overall stock market in a particular region or sector. These indices serve as benchmarks to assess the general direction and health of financial markets, providing investors with a snapshot of how a specific set of stocks or the market as a whole is performing. Several indices are widely followed globally, each serving a unique purpose.

One of the most well-known indices is the S&P 500, which represents the 500 largest publicly traded companies in the United States. Similarly, the FTSE 100 in the United Kingdom comprises the 100 largest companies listed on the London Stock Exchange, while the Nikkei 225 represents major stocks on the Tokyo Stock Exchange in Japan.

How are Stock Market Indices calculated?

Indices can be market-capitalization-weighted, price-weighted, or equally weighted. Market-cap-weighted indices, like the S&P 500, give more weight to larger companies based on their market capitalization. Price-weighted indices, such as the Dow Jones Industrial Average, consider the absolute stock prices of the included companies. Equally weighted indices assign the same weight to each stock, regardless of its market capitalization or price.

Indices are used as benchmarks

These indices are valuable tools for investors, allowing them to gauge the performance of a specific market segment, track trends, and make informed investment decisions. Investors often use indices as benchmarks to evaluate the performance of their portfolios against the broader market. Additionally, financial products like index funds and exchange-traded funds (ETFs) are designed to replicate the performance of specific indices, providing investors with diversified exposure to a market or sector without having to buy individual stocks.

Here are our guides to the world’s major stock market indices.

Stock market indices are influenced by a myriad of factors that collectively shape market movements. Some key factors include:

  1. Economic Indicators: Data on GDP growth, employment figures, inflation rates, and other economic indicators impact market sentiment.
  2. Corporate Earnings: The financial performance of individual companies within the index affects overall index movement.
  3. Interest Rates: Central bank decisions on interest rates can influence borrowing costs and corporate profitability.
  4. Geopolitical Events: Political instability, trade tensions, or geopolitical crises can cause market volatility.
  5. Investor Sentiment: Market perception, news, and speculation influence how investors buy and sell.
  6. Global Economic Conditions: International economic trends can impact multinational companies within the index.
  7. Government Policies: Fiscal and monetary policies set by governments and central banks influence economic conditions.
  8. Market Liquidity: The ease with which assets can be bought or sold impacts index movements.
  9. Technological Advances: Technological developments can affect industries and companies, influencing index performance.
  10. Natural Disasters: Events like hurricanes or earthquakes can impact specific industries or regions.
  11. Currency Fluctuations: Changes in exchange rates can affect the competitiveness and profitability of multinational companies.
  12. Market Speculation: Traders’ perceptions and speculative activities can drive short-term fluctuations.

Understanding these factors and their interplay is crucial for investors and traders to make informed decisions. It’s important to note that the stock market is dynamic, and multiple factors can contribute to its movements simultaneously. Investors often use a combination of fundamental and technical analysis to navigate these complexities.

Trading equity indices involves buying and selling financial instruments based on the performance of a specific index. In order to gain exposure to your chosen stock market indices, you can use futures contracts, like E-mini S&P 500 (ES), E-mini Nasdaq-100 (NQ), or E-mini Dow Jones (YM).

Exchange Traded Products, or ETFs, can also be used to trade these indices, as well as CFDs or other Spread Bet products with individual brokers.

Each of these products can offer a great way for investors to proxy an entire market without having to buy individual shares.

Indices News & Insight

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 21st June

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 14th June

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 7th June

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 31st May

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 24th May

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 17th May

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 10th May

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 3rd May

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the US, UK and Eurozone for the week of 26th April

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and Eurozone for the week of 29th March

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and Eurozone for the week of 22nd March

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 1st March

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 22nd February

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 15th February

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 1st February

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 25th January

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 18th January

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 21st December

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 9th November

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 2nd November

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 6th July

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 8th June

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 1st June

The UK, US and the Eurozone in the week ahead

The UK, US and the Eurozone in the week ahead

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 6th April

Is the stage set for a Santa Rally?

Is the stage set for a Santa Rally?

The stage looks set for equities to grind higher into next year and continue climbing the “wall of worry”, supported by receding risks on the geopolitical front

Can I use artificial intelligence to trade biotech stocks?

Can I use artificial intelligence to trade biotech stocks?

Biotech seems like something of a niche sector, but one US developer has brought AI analysis to trading these stocks.

Global growth set to recover over the year ahead?

Global growth set to recover over the year ahead?

Kingswood Head of Research Rupert Thompson suggests that global growth will recover somewhat over the coming year following the easing in monetary policy and reduced trade worries

Are indicators pointing to an impending recession?

Are indicators pointing to an impending recession?

Recession indicators have been flashing over the past few months and investors are bracing themselves. But what does history tell us?

Stock investors smile the world over

Stock investors smile the world over

The US stock market is up nearly 20% in 2019, but how does that compare with equity markets around the world?

What’s happening this week in the US, UK and the Eurozone?

What’s happening this week in the US, UK and the Eurozone?

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 15th July

Emerging markets: BRICS in the same boat

Emerging markets: BRICS in the same boat

Having lead world economic growth for a number of years, the future for BRICS economies is looking less rosy as each faces the prospect of declining output

What’s happening this week in the US, UK and the Eurozone?

What’s happening this week in the US, UK and the Eurozone?

Spreadex analyst Connor Campbell looks at the macroeconomic picture and its effect on the markets in the US, UK and the Eurozone for the week of 24th June

What’s happening this week in the US, UK and the Eurozone?

What’s happening this week in the US, UK and the Eurozone?

Spreadex analyst Connor Campbell looks at the macroeconomic picture and it's effect on the markets in the US, UK and the Eurozone for the week of 17th June  

You Say You Want to Leave the Union…?

You Say You Want to Leave the Union…?

Uncertainties over the UK’s plans to leave the European Union has generally stirred unease across global financial markets, central bank monetary policies, as well as economic growth prospects

Coutts identifies these investment opportunities for 2019

Coutts identifies these investment opportunities for 2019

Coutts, the wealth management firm has published a report identifying investment opportunities for 2019, despite the current global uncertainties

Watson’s Weekly: Italian budget, UK High Street and the Auto sector

Watson’s Weekly: Italian budget, UK High Street and the Auto sector

On the macroeconomic side of things, the EU rejected Italy’s proposed budget. Funnily enough, the Italians didn’t like this and…

Emerging Markets: Young demographics cannot be ignored

Emerging Markets: Young demographics cannot be ignored

Saxo Bank has published its Q4 2018 Quarterly Outlook for global markets. Against an uncertain backdrop, the Outlook offered some interesting…

We are clearly at a crossroads on many fronts

We are clearly at a crossroads on many fronts

Saxo Bank has published its Q4 2018 Quarterly Outlook for global markets. Over the coming days, The Armchair Trader will…

US carmakers suffer as tariffs and other headwinds take a toll

US carmakers suffer as tariffs and other headwinds take a toll

Ford, General Motors and other car manufacturers face perennial challenges

Fed policy uncertainties arise as Eurodollar futures flash yield curve inversion risk

Fed policy uncertainties arise as Eurodollar futures flash yield curve inversion risk

While the Federal Reserve is widely expected to hike interest rates at its upcoming monetary policy meeting, a host of…